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    GST Seamless Flow of Credit

    Uploaded by

    Anjali Krishna S
    The document discusses key aspects of the implementation of GST in India such as: 1) It lists the first few states to approve the GST bill and pass their respective state GST bills. 2) It describes features of GST like being a value-added tax levied on supply with a continuous chain of tax credits borne by the final consumer. 3) It provides examples of how input tax credit flows through the supply chain from manufacturer to retailer to consumer, with the tax burden being borne by the final consumer.

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    GST Seamless Flow of Credit

    Uploaded by

    Anjali Krishna S
    9 views10 pages
    The document discusses key aspects of the implementation of GST in India such as: 1) It lists the first few states to approve the GST bill and pass their respective state GST bills. 2) It describes features of GST like being a value-added tax levied on supply with a continuous chain of tax credits borne by the final consumer. 3) It provides examples of how input tax credit flows through the supply chain from manufacturer to retailer to consumer, with the tax burden being borne by the final consumer.

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    GST flow of credit

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    GST Seamless flow of credit

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    The document discusses key aspects of the implementation of GST in India such as: 1) It lists the first few states to approve the GST bill and pass their respective state GST bills. 2) It describes features of GST like being a value-added tax levied on supply with a continuous chain of tax credits borne by the final consumer. 3) It provides examples of how input tax credit flows through the supply chain from manufacturer to retailer to consumer, with the tax burden being borne by the final consumer.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    9 views10 pages

    GST Seamless Flow of Credit

    Uploaded by

    Anjali Krishna S
    The document discusses key aspects of the implementation of GST in India such as: 1) It lists the first few states to approve the GST bill and pass their respective state GST bills. 2) It describes features of GST like being a value-added tax levied on supply with a continuous chain of tax credits borne by the final consumer. 3) It provides examples of how input tax credit flows through the supply chain from manufacturer to retailer to consumer, with the tax burden being borne by the final consumer.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 10

    GST –Seamless flow of input tax credit

     First state to approve the GST bill – Assam (2nd Bihar)

     16th state to approve GST bill- Odisha (Approval of 16 states

    (50% of state) is required for implementing GST)

     First state to pass the State GST bill- Telangana (9th April 2017)

     Kerala passed the state GST bill- 21st June 2017

     GST Bhavan in Kerala is situated at – Thiruvanthapuram

     New indirect tax network of the Central Board of Excise and

    Customs (CBEC) for the implementation of GST- Project

    Saksham

     The Government of India has launched a GST training programme

    to training to youths will be provided under the Pradhan Mantri

    Kaushal Vikas Yojana (PMKVY)

     Mobile application by Income tax department- Aaykar Setu

    2021/22 2
    GST –Seamless flow of input tax credit

    Features of GST

     GST is a value added tax levied on supply


     Continuous chain of tax credits
     Burden borne by final consumer
     No cascading of tax

    Particulars Manufacturer Distributor Retailer Consumer


    Cost 80,000 100,000 120,000 136,500
    Profit 20,000 20,000 10,000
    Sales Price 100,000 120,000 130,000
    Output tax - GST @
    5% 5,000 6,000 6,500
    Total transaction
    Value 105,000 126,000 136,500 .
    Input tax credit Nil 5,000 6,000 Nil
    Paid to
    Government 5,000 1,000 500
    Value Addition (A) 100,000 20,000 10,000 130,000
    GST @ 5%
    (A*5%) 5,000 1,000 500 6,500

    2021/22 3
    GST –Seamless flow of input tax credit

    Intra State Supply


    A, B & C – Kerala.
    Tax rate 18%

    Particular A to B B to C
    Transaction Value 10,000 12,000*
    CGST @ 9% 900 1080
    SGST @ 9% 900 1080
    Total Tax 1800 2160
    Total Price 11,800 14,160
    Input tax credit available
    CGST - 900
    SGST - 900
    Amount Paid to
    Government A B Total
    CGST 900 180** 1080
    SGST 900 180** 1080

    * 20% Value Addition


    ** Input tax credit Available 900. So Net tax liability 1080-900= 180

    2021/22 4
    GST –Seamless flow of input tax credit

    Inter State Supply


    A= Kerala, B= Kerala, C= Goa & D= Goa
    Tax rate = 18%

    Particular A to B B to C C to D
    Transaction Value 10,000 12,000 14,400
    CGST @ 9% 900 1,296
    SGST @ 9% 900 1,296
    IGST @ 18% - 2,160 -
    Total Tax 1,800 2,160 2,592
    Total Price 11,800 14,160 16,992
    Input tax credit
    available
    CGST - 900
    SGST - 900
    IGST - 2,160
    Amount Paid to
    Government A B C
    CGST 900 -
    SGST 900 432
    2160-
    IGST 1800= 360 -
    Total 1,800 360 432

    Total Tax = 1800+360+432= 2592

    2021/22 5
    GST –Seamless flow of input tax credit

    Order of utilization of input tax credit –

    First, IGST credit should be utilized towards IGST payment, and then
    towards payment of CGST and SGST/UTGST in any order and in any
    proportion.

    After entire ITC of IGST is utilized, ITC of CGST should be utilized for
    payment of CGST and IGST in that order. Thereafter, ITC of SGST/UTGST
    should be utilized for payment of SGST/UTGST and IGST in that order.

    o It may be noted that ITC of CGST cannot be utilized for payment of


    SGST/UTGST and vice versa.
    o ITC of SGST/UTGST should be utilized for payment of IGST, only after
    ITC of CGST has been utilized fully.

    Output Tax liability of


    IGST CGST SGST

    IGST 1 2 (Any proportion)


    Input tax CGST 4 3 No
    credit
    available SGST 6 No 5

    2021/22 6
    GST –Seamless flow of input tax credit

    Question-1
    Compute the net GST liability payable in cash?
    Particulars Output tax
    IGST 2160
    CGST 500
    SGST -
    Total 2660
    Input tax
    IGST 1000
    CGST 900
    SGST 900
    Total 2800

    Answer
    Balance
    Cash to Carry
    Particular IGST CGST SGST Pay forward
    Output tax 2160 500 0
    Set off
    IGST 1000 - -
    CGST 400 500 0 - -
    SGST 760 - 140

    Cash = 0, SGST carry forward= 140

    2021/22 7
    GST –Seamless flow of input tax credit

    Question 2
    Compute the net GST liability payable in cash?

    Particulars Output tax


    IGST 500
    CGST 1,500
    SGST 2,000
    Total 4,000
    Input tax
    IGST 3,000
    CGST 500
    SGST 200
    Total 3,700

    Answer
    Balance
    Cash to Carry
    Particular IGST CGST SGST Pay forward
    Output tax 500 1500 2000
    Set off
    IGST 500 1,000 1,500 - -
    CGST - 500 - - -
    SGST - - 200 300 -

    Cash= 300 SGST, Carry forward Nil

    2021/22 8
    GST –Seamless flow of input tax credit

    Alternative
    Balance
    Cash to Carry
    Particular IGST CGST SGST Pay forward
    Output tax 500 1500 2000
    Set off
    IGST 500 1,500 1,000 - -
    CGST - - - - 500
    SGST - - 200 800 -

    2021/22 9
    GST –Seamless flow of input tax credit

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    Thank you

    2021/22 10

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